Ipo Adaro Tbk Case Study

IPO (Initial Public Offering) of PT. Adaro Energy Tbk.

Execution IPO (Initial Public Offering) PT. Adaro Energy Tbk. has been awaited by capital market actors. Coal Price that penetrate US$ 215 per ton on July 2008 in the global market result capital market actors very interest to buy share at company of coal mining. Particularly PT Adaro Energy Tbk. is company of coal mining that has biggest reserve in Indonesia.1 Listing in Indonesia Effect Exchange (BEI) is executed on 16 July 2008. In this listing time, Adaro sell 11,139 billion share sheets or 34,83% from totalize company share and fund that obtained is Rp. 12,253 trillion. That fund will be used to buy share from some foreign stockholders that have share at three strategic companies, 33% share of PT Adaro Indonesia, 33% share of PT Indonesia Bulk Terminal (IBT) and 36% share of Coaltrade Services International Pte Ltd,. The three of that company is strategic business unit for Andaro. After execution IPO the formation of share ownership of PT Adaro Energy Tbk. Shall be as follows: PT Saratoga Investama Sedaya (14,93%), PT Triputra Investindo Aryan (13,34%), PT Persada Capital Investama (11,01%), Garibaldi Thohir (7,8%), PT Trinugraha Thohir (7,8%), Edwin Soeryadjaya (4,3%), T. Permadi Rachmat (2,27%), Sandiago Salahuddin Uno (2,07%), Subianto (1,3%), PT Saratoga Sentra Business (0,25%) and society (34,83%)2. Though execution IPO PT. Adaro Energy Tbk. projected become biggest IPO in 2008, nevertheless much polemics that paralleled with its execution. The polemic are presumption of practices transfer price and suing to the ownership of Adaro share by

Beckkett Pte. Ltd. Presumption of practices transfer price case is related to existence of coal purchase contract with Coaltrade Services International Pte Ltd. In that contract, Coaltrade Services International Pte Ltd. entitled to buy coal with under global market price from Adaro, and sell it to the global market with global market price. According to the agreement, per annum Coaltrade Services International Ltd entitled to buys 10 million tons with maximum price is US$ 32 per ton, and sell it with global market price that penetrate US$ 215 per ton on July 20083. The owner of Coaltrade and Adaro is the same party, so when Adoaro sale coal ownership to Coaltrad not interpreted as sale but transfer price inter Affiliation Company. This step is suspected to avoid tax and royalty payment in Indonesia. Tax rate of PPh Badan in Singapore is 10%, lower than rate in Indonesia that reaches 30%. In other hand in Indonesia existed obligation for coal company to pay royalty as high as 13, 5 % from sold value. President of Center for Banking Crisis (CBC), Achmad Deni Daruri predicts sale PT. Adaro Energy Tbk. decrease as high as Rp. 10 trillions from transfer pricing practices. So it's predicted detrimental State as high as Rp. 4,35 trillions, Rp. 3 trillions from tax PPh Badan and Rp. 1,35 from royalty payment. Second Polemic is lawsuit to the share ownership PT. Dianlia Setyamukti in PT Adaro Indonesia by Beckkett. Pte. Ltd. This Lawsuit began when PT Asminco Bara Utama (Asminco), where PT Swabara Mining and Energy (Swabara) it's one of stockholder its, get loan facility from Deutsche Bank of Aktiengesellschaft have the shape of bridge facility. This Debt contract is poured in Share Pledge Agreement on 24 October 1997. The amount of debt is US$ 100 million with guarantee all shares Swabara in Asminco, all shares Asminco in PT Adaro and PT Indonesia Bulk Terminal. Beckkett

Pte Ltd haves 74,2% share in PT Swabara Mining and Energy. Swabara haves 99,9% share in PT Asminco Bara Utama that have share each of 40% in PT Adaro and PT Indonesia Bulk Terminal4. In that agreement agreed on, if negligence already happens, without getting the any verdict, Deutsche may sell all or some of share that mortgaged in auction or in private selling (underhand), as far as enabled by law. After debt fall due at August 1998, Asminco fail to pays and had been conducted restructuring effort at least for three year. After Asminco still not pays its debt till three year lengthening of times, on 6 December 2001 Deutsches Bank of apply stipulating to South Jakarta District Court to execute share pawn. On 11 December 2001, Court grants application and release stipulating that permit Deutsche Bank to execute share pawn and sale in private selling. Its reason, that application already pursuant to Civil Code (KUHPerdata). After get provision, on 15 February 2002, Deutsche sells Swabara share in Asminco to PT Akabiluru, and Asminco share in Adaro and Indonesia Bulk Terminal sold to PT Dianlia Setyamukti as big as US$ 46 millions. This sale process are questioned by Beckkett because sale conducted without foreknown, and Deutcshe Bank has conducted konspirasi with Dianlia so share price gone beyond cheap. Beckkett asks Deutsche Bank o to return its share in Adaro or compensate as big as US$ 133 million. This Suing is raised to South Jakarta District Court, nevertheless before first conference is started, Beckkett draws its suing. After withdraw its suing in South Jakarta District Court, then Beckkett apply stipulating cancellation executes share to Jakarta High Court. On 25 February 2005 Jakarta High Courts grants application Beckkett and cancel stipulating South Jakarta District Court, by reason is South Jakarta District Court did not have infroma to give

decision. Thereby, the execute of share pawn is assumed cancelation to law. This Cancellation then strengthened with Supreme Court letter number 01/Tuada.Pdt/III/2006 dates 3 March 2006. In that letter expressed, stipulating South Jakarta District Court is canceled to law. Its reason, that case is suing case (contentieuse jurisidictie) and not application case (voluntaire jurisdictie). That letter content affirms, if there is party that feel getting disadvantage with stipulating South Jakarta District Court, they can bring a lawsuit to the court. Not only till here effort Beckkett Pte Ltd to retake its share in Adaro. Beckkett Pte Ltd go throughs legal effort to The High Court of The Republic of Singapore, that form a part of Supreme Court Singapore. Nevertheless this effort fails, in adjudication Kan Ting Chiu No. 326 of 2004/Q dates 21 September 2007 tell that not found existence of evidence konspirasi in sale 40% share Adaro by Deutsche Bank to Dianlia.5 After legal effort Beckkett Pte Ltd in Singapore is failed, polemic of share sale in privat selling have not yet stops. Base on Supreme Court letter No. 01/Tuada.Pdt/III/2006 dates 3 March 2006, if there is party that feel getting disadvantage with stipulating South Jakarta District Court, they can bring a lawsuit to the court. Winfield International Investments, Ltd, company comes from Inggris Virgin Islands, as the owner of 215.500 share sheets or 10% Swabara share, bring a lawsuit to the court because feel getting disadvantage. In its suing, Winfield asks cancellation executes of share pawn and share sales because deed are referred is deed contempt of courts. Weinfield also asks material indemnation as big as US$4,5 million and imateriil Rp 500 billion.6 The judges team, Eddy Risdiyanto, Syafrullah Summar and Efran Basyuning, refuses the Weinfield lawsuit. The judges team made a pretoxt of though the share sold in private selling, the

execute of share pawn by Deutsche Bank has fulfilled formal conditions and validity base law. In accordance with article 1155 and 1556 KUHPerdata, the execution of share pawn can be conducted without medium(judge parate), on condition that beforehand there is agreement to sell in private selling (underhand), and this condition have been decanted in Share Pledge Agreement. The judges team did not accept the reason of loss existence because of process of share sales. Because refers to Indonesian Company Law No.40/2007, shareholders only have entitled to dividend and voting right in General Metting of Shareholders. Switchover of share ownership because of the execution of share pawn does not result loss of Winfield rights. This reason is strengthened with yurisprudence Supreme Court adjudication No. 3139/Pdt/1983.7 In that yurisprudence affirmed, is not make proper if arising out loss from execute pawn object is charged against the party of bank, because, bank has executed court stipulating, in good faith and conducted in correctness. Whereas about the letter from Tuanda Supreme Court, judge has opinion that the letter is not product of court institute, so not have the power of law fastens. On 2 May 2008 Beckkett return sue to South Jakarta District Court with case register No. 626/Pdt.G/2008/PN Jaksel. Nevertheless on 12 May 2008, the lawyer of Beckett from Lucas Lawfirm withdraws that suing. In 19 May 2008, Beckkett registers again its suing, register just have the number 649/Pdt.G/2008. Suing Beckkett is addressed to Deutche Bank, PT Swabara Mining Energy, PT Mulhendi Sentosa Abadi, PT Asminco Bara Utama, and notary Ilmiawan Dekrit Supadmo.8 Related to execution listing plan on 16 July 2008, Beckett file a bills law to Bapepam-LK in Central Jakarta District Court. Beckkett submit application that effective statement of Initial Public

Offering (IPO) PT Adaro Energy Tbk must be canceled. Because there is still lawsuit of share ownership in Adaro, which has been processed in a number of courts, included in Singapore court.

CONCLUTION According to Indonesia Constitution article 33 that all natural resources are used for prosperity Indonesian. Ought to all land products like coal must used for people prosperity. Nevertheless that happened, six coal companies, included Adaro have not yet pay royalty as big as Rp. 131,7 billion and US$ 85,001million, since 2001 till in 2006 have not yet pay royalty to government as big as Rp. 864,07 billion and US$ 330,20 million.9 Base on Achmad Deni Daruri, President of Center for Banking Crisis (CBC), prediction, that Adaro has been detrimental state as big as Rp. 4,35 trillions from transfer pricing practices. Government must acts emphatically by revoke to the permission of company effort that have not yet pay royalty. According to corporate governance principles (Transparency, Accountability, Responsibility, Independence, and Fairness) Adaro haves obligation to submit actual amount of coal production and give explanation about transfer pricing problem. And Adaro pay quickly the royalty as feel responsibility to Indonesia People. According to the story of lawsuit of the share ownership, Adaro old owner have big ambition to control Adaro again. This condition are caused by coal price that leap go up with existence of the increasing of coal need, Coal Price that penetrate US$ 215 per ton on July 2008 in the global. Law Weakness in Indonesia is exploited by Adaro old owner to control adaro again. Indonesia as one of follower of civil law bases, its law

decision based on general principle. The Weakness from general principle, like Indonesian Civil Code, is that sentence that used by the code can be interpreted in accordance with reader idea. So adjudication that released by court can differ for the same case. This condition can be proved in suing to the ownership of Adaro share by Beckkett Pte. Ltd and suing to PT BFI Finance Indonesia Tbk (BFI) by PT Aryaputra Teguharta (APT) to the transfer of share ownership PT Ongko Multicorpora (OM ) it

seem that will never end. For that, government haves obligation to revise general principle that have multi interpretation or make new general principle that that explain all its something clearly and one interpretation.

Endnotes 1

Komang Darmawan, 2008. Ketika Adaro Meniti Bara. Investor, Agustus 2008-X/182.p.39.

2

Hukum Online, July 9, 2008. IPO Adaro Bisa Terhambat. Available from : http://www.hukumonline.com/detail.asp?id=19676&cl=Berita (Accessed on 27 Agt 2008) 3

Hukum Online, May 27,2008.DPR Ajukan Hak Angket Kasus Adaro. Available from : http://www.hukumonline.com/detail.asp?id=19330&cl=Berita (Accessed on 27 Agt 2008) 4

Hukum Online, March 8,2005. Gadai Saham Kembali Menuai Sengketa. Available from : http://www.hukumonline.com/detail.asp?id=12387&cl=Berita (Accessed on 27 Agt 2008) 5

Hukum Online, September 29,2007. Pengadilan Singapura Tolak Gugatan Beckkett. Available from : http://www.hukumonline.com/detail.asp?id=17662&cl=Berita (Accessed on 27 Agt 2008) 6

Hukum Online, November 7,2007. Soal Eksekusi Gadai Saham, Gugatan ke Deutsche Bank Disidangkan. Available from : http://www.hukumonline.com/detail.asp?id=18582&cl=Berita (Accessed on 27 Agt 2008) 7

Hukum Online, May 3,2008. Berbekal Kesepakatan, Eksekusi Bisa Dilakukan Tertutup. Available from : http://www.hukumonline.com/detail.asp?id=19154&cl=Berita (Accessed on 27 Agt 2008) 8

Hukum Online, May 26,2008. Giliran Beckkett Gugat Deutsche Bank di PN Jaksel. Available from : http://www.hukumonline.com/detail.asp?id=19315&cl=Berita (Accessed on 27 Agt 2008) 9

Hukum Online, August 11,2008. Pemerintah Didesak Ambil Alih Penunggak Royalti. Available from : http://www.hukumonline.com/detail.asp?id=19893&cl=Berita (Accessed on 27 Agt 2008)

References

Hukum Online, March 8,2005. Gadai Saham Kembali Menuai Sengketa. Available from : http://www.hukumonline.com/detail.asp?id=12387&cl=Berita (Accessed on 27 Agt 2008) Hukum Online, March 14,2005. Praktek Eksekusi Gadai Saham Simpang Siur. Available from : http://www.hukumonline.com/detail.asp?id=12420&cl=Berita (Accessed on 27 Agt 2008) Hukum Online, March 15,2005. Upaya Hukum terhadap Penetapan Pengadilan Negeri Jadi Perdebatan. Available from : http://www.hukumonline.com/detail.asp?id=12438&cl=Berita (Accessed on 27 Agt 2008) Hukum Online, September 26,2005. Beckkett Bantah Adanya Putusan Pengadilan Singapura Soal Saham Adaro. Available from : http://www.hukumonline.com/detail.asp?id=13673&cl=Berita (Accessed on 27 Agt 2008) Hukum Online, September 2,2007. Gadai Saham Berujung pada Dua Putusan Berbeda. Available from : http://www.hukumonline.com/detail.asp?id=17501&cl=Berita (Accessed on 27 Agt 2008) Hukum Online, September 27,2007. Babak Baru Rebutan Saham BFI. Available from : http://www.hukumonline.com/detail.asp?id=17686&cl=Berita (Accessed on 27 Agt 2008) Hukum Online, September 29,2007. Pengadilan Singapura Tolak Gugatan Beckkett. Available from : http://www.hukumonline.com/detail.asp?id=17662&cl=Berita (Accessed on 27 Agt 2008) Hukum Online, November 7,2007. Soal Eksekusi Gadai Saham, Gugatan ke Deutsche Bank Disidangkan. Available from : http://www.hukumonline.com/detail.asp?id=18582&cl=Berita (Accessed on 27 Agt 2008) Hukum Online, May 3,2008. Berbekal Kesepakatan, Eksekusi Bisa Dilakukan Tertutup. Available from : http://www.hukumonline.com/detail.asp?id=19154&cl=Berita (Accessed on 27 Agt 2008) Hukum Online, May 26,2008. Giliran Beckkett Gugat Deutsche Bank di PN Jaksel. Available from : http://www.hukumonline.com/detail.asp?id=19315&cl=Berita (Accessed on 27 Agt 2008) Hukum Online, May 27,2008.DPR Ajukan Hak Angket Kasus Adaro. Available from : http://www.hukumonline.com/detail.asp?id=19330&cl=Berita (Accessed on 27 Agt 2008) Hukum Online, July 9, 2008. IPO Adaro Bisa Terhambat. Available from : http://www.hukumonline.com/detail.asp?id=19676&cl=Berita (Accessed on 27 Agt 2008) Hukum Online, August 11,2008. Pemerintah Didesak Ambil Alih Penunggak Royalti. Available from : http://www.hukumonline.com/detail.asp?id=19893&cl=Berita (Accessed on 27 Agt 2008) Komang Darmawan, 2008. Ketika Adaro Meniti Bara. Investor, Agustus 2008-X182.p.39